FTSE 100 developers like Barratt Developments and Berkeley
Group are taking part in the scheme, the Financial Times says, adding that on a
property costing £800,000 ($1.5 million), buyers would get a
£30,000 discount.

The report adds that developers will incur a 7 percentage
point hit on margins for "super prime" flat sales, which
comes to about £36 million ($52 million) on a sale of 70
apartments. Developers usually have a "typical profit
margin of 20%," said Mark Cleverly, a partner at Arcadis to the
FT.

So why the discount? The problem comes down to the new stamp duty
tax having a major hit on demand, leading to an oversupply in the
luxury home market. Luxury homes, which carry a hefty price tag,
would incur a massive amount of fees.

If you own more than one property, a 3% stamp duty is
applied. This new fee came into force on April 1 and is
applicable to buy-to-let investors and those who are buying a
second home. This 3% fee is on top of the extra cost of a new
purchase in April.

The amount of "prime" London homes in construction over the next
decade is expected to hit over 35,000, according to the Arcadis Property Pipeline report, but
developers have already been hit hard by Chancellor George
Osborne's new property tax.

The slowdown has been so significant Arcadis is calling for the
government to relax stamp duty on new developments:

To speed-up the delivery of affordable housing and ensure the
construction sector remains sustainable, the Chancellor must
impose a temporary reduction in stamp duty on new build
properties. In tandem with this, he must better focus the debate
onto ensuring acceptable levels of affordable housing are
delivered as part of new development.

"This hits straight at the margin, at a bad time for the
market,” said Cleverlyto the FT, calling stamp duty a
"tax on development."

But it's not just luxury developments that have been affected.

As Business Insider previously reported, the new stamp duty
resulted in a 45% slowdown in all property purchases in April,
after a rush of purchases to beat the deadline in March.

This has resulted in an intense surge of property price rises
prior to the tax rule change. According to Land Registry figures, the
average London homes crossed the £600,000 mark — but there are
fears the impending slowdown could turn into a crash, with
potentially thousands of new luxury developments forced to sell
for way under the expected price.